The fine, which eBay will appeal, was in relation to a suit by LVMH, which owns 50 luxury brands such as Louis Vuitton, Christian Dior, Donna Karan and Tag Heuer. LVMH accused eBay of trading in at least 300,000 Dior items and 150,000 Louis Vuitton items in 2006. eBay also lost an earlier case brought by handbag maker Hermes.

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Jenny Thomas, eBay's UK spokesman, said LVMH was trying to stifle legitimate trade in second-hand and unwanted goods by conflating it with trade in counterfeit products. "This is all about controlling the secondary market," she said.

She said over 18,000 brand owners and individuals had joined eBay's verified rights' owners scheme (Vero). But not LVMH. "We have approached them several times but they have always refused," she said.

Vero members can ask eBay to remove any counterfeit items or sites they believe are selling these goods. "In most cases we take down the site at once and 90% within four hours, at any rate, well before the expiry time," Thomas said.

She said last year eBay took down 2.2 million potentially counterfeit listings and suspended 50,000 sellers suspected of selling counterfeit goods.

She added that eBay returns listing fees to the seller. "We do not want to be associated with making money from questionable enterprises," she said.

eBay faces similar legal challenges in other jurisdictions from other brand owners such as Tiffany's the jeweller and cosmetics firm L'Oreal.

Thomas said eBay spends more than £10m a year to fight fraud. It has a dedicated anti-fraud squad in Dublin, and uses internal and external consultants to train police forces how to fight crime on the auction site.

"Last year we trained 7,000 law enforcement officials and helped in more than 66,000 investigations which led to the arrest or conviction of over 500 individuals," Thomas said.

The European Commission is currently looking to introduce pan-European legislation that would give greater protection to online consumers, especially those who require redress because they are dissatisfied with the goods they receive.

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